VFC

VF Corporation Reports 10% Revenue Decline

VF Corporation, a global leader in branded lifestyle apparel, footwear, and accessories, has recently released its 10-K report. The company operates through three segments: Outdoor, Active, and Work, offering a diverse portfolio of brands such as The North Face, Timberland, Vans, and Supreme. VF primarily sells its products through wholesale channels, direct-to-consumer operations, and e-commerce sites.

In the year ended March 2024, VF reported a 10% decrease in revenues to $10.5 billion compared to the previous year, with a 1% favorable impact from foreign currency. The Outdoor segment revenues decreased by 3% to $5.5 billion, the Active segment revenues decreased by 17% to $4.1 billion, and the Work segment revenues decreased by 16% to $891.5 million. Wholesale revenues were down 14%, and direct-to-consumer revenues were down 5%, with e-commerce revenues decreasing by 8%.

The company's gross margin decreased by 50 basis points to 52.0% in the year ended March 2024, primarily driven by unfavorable foreign currency impacts, partially offset by favorable mix. VF reported an operating margin of (0.3)% in the same period, down from 2.8% in the previous year, primarily due to various impairment charges, including $507.6 million related to the Timberland, Dickies, and Icebreaker reporting units.

VF's net interest expense increased by $58.8 million to $223.4 million in the year ended March 2024, primarily due to additional borrowings on long-term debt at higher rates. The company also reported an effective income tax rate of (314.6)% in the same period, including a net discrete tax expense of $704.6 million related to the Timberland tax case and Belgium excess profits ruling.

Despite facing challenges such as a cybersecurity incident and the Reinvent transformation program, VF remains committed to its strategic priorities, including improving brand-building, operating performance, and financial strength. The company's Board of Directors declared a quarterly dividend of $0.09 per share to be paid during the first quarter of Fiscal 2025, reflecting a 70% reduction compared to the previous quarter.

It's important to note that the COVID-19 pandemic and geopolitical conflicts have had varying impacts on VF's business, with temporary closures of retail stores and ongoing uncertainties in certain regions. The company continues to navigate these challenges while focusing on its long-term growth strategies and financial resilience. Today the company's shares have moved -3.0% to a price of $11.96. For the full picture, make sure to review V.F.'s 10-K report.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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